The CSFI's Banking Banana Skin 2014 survey, produced in association with PricewaterhouseCoopers, was carried out in January and February 2014 and is based on responses from 656 bankers, banking regularors and close observers of the industry around the world.
The report, which describes the risks currently facing the global banking industry, found that the emerging market grouping BRICS (Brazil, Russia, India and China) have fallen out of favour with some of the world’s largest financial institutions.
“Many respondents were worried about potential volatility in countries that, until recently, ranked high on the financial pick list,” the report said.
One respondent, a senior executive at an Australian bank that is closely linked economically to China, said: “The growth in cross-border exposures to
Chinese banks and state-owned enterprises has risen significantly, creating a potential systemic risk.”
The PwC survey found there are also concerns in India about the level of non-performing assets on banks’ balance sheets, while credit issues have also arisen.
Emerging market financial consultancy Clock Tower International’s chief executive Nishi Agrawal said that by leapfrogging into mobile banking, emerging country banks had bypassed traditional banking credit check processes which provide a safety net.
“The process of credit checks and its infrastructure need extensive development especially with the growth of the middle classes,” Mr Agrawal said.
“The investment of this development will run into millions and hence, is still not high on the list of priorities,” he said.
